Amid pro-crypto policies emerging from the US Congress toward crypto assets, American multinational investment bank, Citigroup, is contemplating the introduction of stablecoin custody services and crypto-focused exchange-traded funds (ETFs).
Biswarup Chatterjee, Citigroup’s global head of partnerships and innovation for its services division, indicated that the bank is primarily focused on providing custody services for the high-quality assets that support stablecoins.
Although Citigroup had previously mentioned its interest in potentially launching its own stablecoin, the bank has not elaborated on its comprehensive plans for digital assets until now.
The largest of these ETFs, BlackRock’s iShares Bitcoin Trust (IBIT), boasts a market capitalization of around $90 billion, necessitating secure management of an equivalent amount of digital currency to support these financial products.
Currently, Coinbase dominates the custody business for crypto exchange-traded funds, serving as custodian for over 80% of their issuers.
Per the report, Citi’s current offerings include “tokenized” US dollar payments that utilize a blockchain network to facilitate transactions around the clock between accounts in major financial hubs like New York, London, and Hong Kong.
The bank is working on developing services that would allow clients to transfer stablecoins between accounts or convert them into dollars for instant payments. Chatterjee noted that discussions with clients are ongoing to explore various use cases for these services.
However, Reuters highlights that Citigroup and its peers will still need to navigate existing regulations, including those related to anti-money laundering (AML) and currency controls, particularly for international transactions.
The potential issuance of a stablecoin by Citigroup is also being considered, signaling the bank’s commitment to adapting to the cryptocurrency industry.
Featured image from DALL-E, chart from TradingView.com
